The Supreme Court of India has dismissed the Special Leave Petition filed by the Revenue department against the order of the Bombay High Court in a case involving liability to pay interest when the duty was paid before finalization of provisional assessment. The Apex Court in its Order dated 14-12-2015, found absence of any merit in the petition filed by the Revenue.
The Bombay High Court had in its impugned Order dated 6-2-2015 held that the liability to pay interest does not arise unless finalisation of the assessment results in any additional or differential liability. It was held that however in case where the differential duty is paid prior to the finalisation of the assessment, then interest is not payable.
It may be noted that the Order passed by the Bombay High Court is now affirmed by the Supreme Court. The issue as to whether payment of interest on differential duty paid prior to finalization of provisional assessment under the provisions of Rule 7 of the Central Excise Rules, 2002 has been settled.